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Know Your Rights as a Yellowknife Home Buyer or Seller

Know Your Rights as a Yellowknife Home Buyer or Seller

On January 1, 2022, the Northwest Territories Association of REALTORS® mandated the use, by all of its Realtor members, of a series of forms intended to protect buyers and sellers from costly misunderstanding about their rights.  The main purpose of the forms is to help real estate clients and customers understand whether or not they can count on the undivided loyalty of the Realtor they are working with.

Here are a few of examples of situations where the new forms will protect buyers and sellers.

Scenario #1 – The Unrepresented Buyer

When a potential buyer asks a Realtor to show them a series of homes, and then asks them to assist with writing up an offer, they generally assume that the Realtor is their agent (known as a “buyer’s agent,”) and is working for them.  But that isn’t always the case.  Sometimes the Realtor is the listing agent and is therefore already representing the seller.  And in even more confusing situations, some Realtors choose to work as assistants to listing agents (even those from different brokerages).  They can show homes to buyers, assist buyers with paperwork, but they are working for the sellers the entire time and never owe the buyers a duty of loyalty or confidentiality.

Unless the buyer is made aware very early on in the process that the Realtor is not working for them, they may compromise their own negotiating position by revealing strategically sensitive information to the Realtor which they incorrectly assume will not be used against them.  And they will also remain unaware that they could have chosen to work with a different Realtor – a buyer’s agent who would have provided them with undivided loyalty at no cost.

Technically, the Canadian Real Estate Association has had a rule in place to assist buyers in avoiding such compromising situations since the 1990s, but the Northwest Territories Association of Realtors did not become aware of the new rule until 2013 and did not adopt the necessary forms to help buyers avoid these situations until January 1st of this year.

The solution includes two forms: the NWTAR’s new Consumer Relationships Guide (which is now required reading for all sellers and prospective buyers) and the Non-Exclusive Buyer Representation Agreement.

In a situation where, after being made aware of their options, the buyer chooses not to seek their own representation, they are required to sign the new Customer Acknowledgement Form.  This allows the Realtor to ethically “double-end” on the transaction, assisting the buyer as a customer rather than as a client.

Scenario #2 – The Frustrated Seller

When a homeowner hires a Realtor as their listing agent, they generally assume they can count on the Realtor’s undivided loyalty.  But in some cases, the Realtor will go on to also represent the buyer, and the seller finds themselves being advised by “their” Realtor to compromise on price and other aspects of the negotiation.  They may question whether the Realtor is getting them the best price possible or simply trying to get the deal done at any price.  Effective January 1st, a listing agent cannot represent both seller and buyer without the prior written consent of their original client, the seller.  This is the purpose of the NWTAR’s new Agreement To Represent Both Seller And Buyer.

Scenario #3 – The Frustrated Buyer

In today’s hot market, multiple offer situations have become common.  It is not unheard of for a buyer to submit a losing bid, only to find out after the fact that their Realtor worked with more than one buyer, including the winner.  This may raise concerns about confidentiality and loyalty.  While this is far from an ideal situation, is some places, small communities in particular, it can sometimes be unavoidable.  Working with multiple buyers can be done ethically as long as all of the buyers are made aware that they have the right to work with other Realtors at no cost, but should they choose not to, they will be treated as customers, and not clients.  In other words, the buyers are assisted with paperwork by the Realtor, but none of them are receiving advice on pricing or are owed a duty of undivided loyalty.

In order to work with multiple buyers, a Realtor who has entered in to a Buyer Agency Agreement with one buyer would have to request release from that agreement before working with anyone else, and would then have to request that the buyer sign a Customer Acknowledgement Agreement, thereby downgrading their relationship from that of a client to a customer.

Although the NWTAR’s new agency disclosure forms will help protect buyers and sellers, the NWTAR does not yet have a way to ensure their use by its members. So, for the time being, it remains extremely important that buyers and sellers educate themselves about their rights and remain vigilant about the paperwork they are provided with by their Realtors.  If you were not informed of your agency options before being shown homes, or if your listing agent represented the buyer without your prior written permission, you can inform the NWTAR’s professional standards committee by e-mailing the Association’s Executive Officer, Pat Moore, at pmoore@offcomp.ca.

The trademarks REALTOR®, REALTORS®, and the REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA. 

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